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Social Security

02/22/2018

It is unlikely that both members of a couple will pass away at the same time and the surviving spouse will be attempting to cope with the situation. They probably should not be worrying about about finances, according to USA Today in "How to prepare financially for being a widow/widower."

Here are some practical steps to take now, so you will be prepared to be a surviving spouse:

The most important step is taking the time to talk and make sure that both spouses are well-informed about the finances and how to handle them.

Run through scenarios so you will both know what will happen when either spouse passes away, taking into consideration what the surviving spouse's income and living expenses will be.

If you can afford to do so, then delaying Social Security benefits as long as possible will give a surviving spouse higher benefits.

Make sure that all beneficiary designations on retirement plans, bank accounts and insurance policies are correct.

It may be necessary to hire a financial planner who can help the surviving spouse.

Visit an estate planning attorney and make sure that your estate plan is up to date and adequately protects the surviving spouse.

It might be a good idea to move into a different home that will be more easily manageable for a surviving spouse.

A new study has found that the U.S. is going in the wrong direction. For the third straight year, the premature death rate has risen. This means that more years are being lost prematurely per 100,000 people.

While no one can be certain just why Americans are not living as long as they did previously, this new study strongly indicates that the opioid crisis takes considerable blame as well as the rapid rise of drug deaths in the U.S.

If the study is correct about the reason for more premature deaths, then it is likely that the government will need to do more to address opioids in the near future.

The government also needs to know its estimates regarding future Social Security, Medicare and Medicaid costs.

While there are different measures of how many Americans have retirement accounts and how much money most people have in those accounts, it appears that overall people are not saving enough for their own retirements.

Only about 45% percent of Americans have an employee-sponsored retirement account and only about 14% own any stocks directly. Even among those people who have retirement accounts, it appears that most of them are not putting nearly as much into them as they need to.

This could make things more difficult for Republicans to reform Social Security and Medicare. Americans might be more reliant on the programs in the future, than many politicians think.

08/17/2017

How a person accumulated wealth is a key factor in the decision on eligibility to receive benefits.

Wealthy people are eligible for Social Security, as long as they did not accumulate their wealth through passive means, according to The Motley Fool in "Do Billionaire's Get Social Security?"

If a person worked at least 10 years and paid into Social Security, they are eligible no matter how much money they have.

Whether wealthy people should get Social Security or if the program should be limited only to those without the means to take care of themselves, was a subject of debate at the time the program was founded.

President Franklin D. Roosevelt ultimately decided that the program should not be means-tested, so it would be viewed as a universal right by people. He believed that would make the program much more difficult to cut or eliminate, if future politicians tried to do so.

The story begins nearly three decades ago, when a four-year-old boy was erroneously placed on the U.S. government’s "Master Death File" list of the deceased. When government agencies learn of someone's death, they record the information in the file to make sure that any payments, such as Social Security, do not continue to be paid.

It is not a perfect system as Adam Ronning can attest to, because for 29 years, he was unsuccessful in getting the IRS to recognize that he was, in fact, alive. However, through the intervention of Minnesota Sen. Amy Klobucher, he has now legally been brought back to life.

Every year approximately 9,000 people are wrongly added to the master death file, which is a tiny percentage of people in a nation with over 300 million citizens. Most names erroneously placed on the list are the result of clerical errors, not any malicious intent.

However, despite the small numbers of people who are affected, it is still a big enough problem that more care should be taken to avoid these errors.

It is important to correct the list as soon as possible, if you are erroneously placed on the list because signing up for your retirement benefits may end up being a problem.

The result of this trend is that wealthy Americans are receiving a disproportionate amount from the Social Security and Medicare system. However, when all government benefit programs are considered, the lowest income levels and the wealthiest receive about the same overall.

The problem is that the Social Security system needs to be fixed, to make sure it remains solvent.

One way to fix it is to increase the retirement age, but that will make the problem worse. Wealthier Americans will not be affected as much as many poorer Americans who will not live to see any benefits. This will effectively make their payments into the system, a tax on them for the benefit of the wealthy.

Another solution is through means-testing Social Security, but the program was designed without means-testing to make it more difficult to cut later on.

Many recent studies report that the average American has saved far less than experts think they will need.

There are many reasons for this situation, but the reasons for not saving are not as important as what it means for future senior citizens.

The biggest issue is simply that people, on average, are living longer than ever before. That trend is expected to continue as medical science progresses. No one is certain just how long people will live after retirement in the future.

People who have planned to save for 20 years of retirement living might actually need to save for 30, 40 or even more years. This also creates problems for elderly safety nets.

Social Security, Medicare and Medicaid are already under financial stress because of the large number of Baby Boomers entering their retirement years. The longer people live, the more that those programs will need to pay out. Many people believe the programs will have to offer substantially fewer benefits in the future.

The average cost of just four years of long-term care for an elderly person is $140,000.

As the article points out, parents receive considerable government support to help offset the costs of raising children. The support comes in the form of tax credits and exemptions, in some cases. Lower income families receive support in other ways, such as food stamps and free school lunches.

While there is some support for taking care of the elderly because of Social Security and Medicare, there could be a lot more. Medicaid only pays for the long-term care of elderly people who do not have assets.

Families need to be aware of the high cost of caring for the elderly, so that they can plan accordingly.

01/25/2017

While no one knows the details yet, Trump’s policies could affect wide-ranging changes in government programs like Social Security, Medicare, Medicaid and even impact veterans’ benefits. One analysis group offers their prognostications about what the future may hold.

Michael Gilfix, nationally known authority in the field of law, aging and estate planning, recently shared his insights and those of his Trump Policy Analysis Group (TPAG) in the digital publication, Wealth Management.

Here are some of their observations in regard to policies affecting seniors, veterans and the “medically needy.”

Social Security and Medicare: Trump has stated that he does not want to change Social Security and Medicare. However, he has not stated what, if anything, he will do to ensure that the programs remain solvent. Many of his Republican allies would like to reduce or privatize both programs.

Medicaid: TPAG has examined some of the proposals which are designed to restrict protective planning – making it much more difficult for older Americans to protect their homes and other assets while qualifying for Medicaid, particularly in a Long Term Care setting. They recommend all seniors, and their families, stay up-to-date as more information becomes available.

Tax Proposals: As a candidate Trump proposed many changes in the tax code, including to the estate tax and the capital gains tax. These changes could have a dramatic impact on estate planning and require that many current plans be revisited.

Special Needs: No proposals have yet been made that would directly affect services for special needs children and adults. However, changes in the way that federal Medicaid dollars are dispensed to the states could impact programs on a state-by-state basis.

Veterans’ Benefits: While candidate Trump advocated supporting and even expanding services to veterans, there are currently proposals in Congress to restrict access to needed programs such as Aid and Attendance.